The cloud accounting trend is on the rise for businesses of all sizes. We spoke to Will Lopez, the founder and CEO of AdvisorFi, to find out more about this model. In the past, you had to pay variable billable hours to your local accounting firm. Now, as Lopez explains, cloud-based accounting provides small businesses with a subscription-type payment model instead, along with a number of other valuable advantages.
What Is Cloud-Based Accounting?
As long as you have an internet connection, you can access cloud-based accounting software-as-a-service (SaaS) from anywhere, at anytime, on any device. With this model, your accounting software is stored in the cloud, as opposed to on your desktop computer. "We no longer live in a world where you need to install servers in your office to house all the accounting software you need on-site," says Lopez. "Now, everything's stored remotely in the cloud and you have access to your information 24/7."
As Lopez notes, cloud-based accounting untethers your small business from desktop accounting software packages that aren't integrated across your business locations or devices. "The infrastructure isn't yours, so everything is leaner, more efficient, and agile," he says. "You can now have multiple business locations without the need or cost for local software." This makes the process of transporting transactions much easier. "The data is streamlined and seamlessly connected to your bank account," explains Lopez. Again, all you need is an internet connection and the proper credentials to access your financial data.
The SaaS/Cloud-Based Pricing Model
Small businesses that shift to cloud-based accounting have the opportunity to get more value for a lower cost. With this model, all of your data lives online, which means it doesn't need to be constantly backed up and maintained in your in-house systems. Version upgrades, maintenance, system administration costs and server failures are managed by the cloud service provider.
Cloud-based accounting providers generally charge clients a flat monthly fee based on the requested services and deliverables — similar to a subscription model. As Lopez explains, this fixed-price model comes with its advantages: "It makes budgeting easier for cloud accounting clients, who couldn't be sure of their accounting costs before. You can also upgrade and downgrade whenever you want, based on your evolving needs."
A Platform for Technological Innovation
Technology is emerging that allows cloud-based accounting clients to have even greater access to their financial information. For example, as Lopez says, small business owners "can use their iWatch to literally speak to their books and records. A business owner could say, 'how much cash do I have in the bank?' or 'how many invoices do I have outstanding?' and get an immediate answer." Lopez calls this data transparency and accessibility "the wave of the future."
It's clear that the cloud is disrupting the accounting sector in many ways. As the cloud accounting trend continues to drive cost efficiency and technological innovation, small businesses are provided with more accounting options than ever before.
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